On this day in 1848, James Marshall, a foreman helping to build a mill for John Sutter outside Coloma, California, found shiny pieces of "rock" in the river and took them to Sutter. They tested the pieces and discovered them to be gold. Sutter wasn't pleased with the discovery and tried to keep it quiet. His worry that once the word got out, he might be ruined proved true. Once people began swarming over the area, squatting on his land, destroying crops, and polluting the water, there was nothing he could do.

At the time California wasn't a state yet. Technically it still belonged to Mexico, but it had been ceded to the United States as part of the treaty ending the Mexican-American War. It wasn't even a territory. It was just an area under military control - which meant the laws were nearly non-existent. With the influx of hundreds of thousands of people during the Gold Rush, California became a particularly dangerous place to live.

While poor John Sutter was ruined, and lawlessness prevailed for a while, California managed to pull itself together and become a state within two years. The influx of immigrants severely strained the economy and infrastructure. For example, the population of San Francisco exploded from approximately 1,000 in 1848 to 25,000 in 1850. And, while most were Americans, the lure of gold drew people from around the world.